Tamil software -- enabling typing
in Word, Spreadsheet, presentation and database programmes -- and complying
with Unicode standard should be preloaded. These apart, any other free
educational contents that are useful for the students shall be preloaded in
the laptops.

Note: The proprietary Windows
starter edition with antivirus software valid for a year

Free laptops will have Tamil
Nadu state logo burnt on chip while booting State Logo comes first.

Chennai:The Indian unit of Chinese
personal computer (PC) maker Lenovo Group Ltd has emerged as the lowest bidder
for providing laptops to the Tamil Nadu government, which aims to give away 906,000
of the machines to students of state-aided colleges and high schools this
fiscal year to fulfil a pre-election pledge by chief minister J. Jayalalithaa.

Lenovo India Pvt. Ltd quoted a price
of Rs13,939 per laptop, around Rs10,000 lower than the retail price, as it
seeks to increase market share in a country where it ranks number four among PC
makers.

The second-lowest bid of Rs14,452
was put in by HCL Infosystems Ltd, said an official at the Electronics
Corporation of Tamil Nadu Ltd (Elcot), the state agency charged with managing
the procurement of laptops. Given the size of the order, it will be distributed
among several bidders, said the official, who didn’t want to be named.

Lenovo India managing director R.K.
Amar Babu, while not denying the company had emerged as the lowest bidder,
declined to discuss price and quantity.

“We are still some time away from
the actual order,” he said. “Discussions are on with vendors about price and
quantity.”

The laptops are among the freebies, including
kitchen mixers, wet grinders and livestock, that Jayalalithaa promised to dole
out if she was voted to power in the state elections held in April.

After she swept to victory, she
began making good on her poll promises, taking out tenders to procure vast
numbers of the giveaways, which have had firms vying to be the lowest bidders
and win the large-volume orders.

The Tamil Nadu government plans to
distribute 6.8 million free laptops to students of government-aided high
schools and colleges through the five-year term of this administration, at a
cost of Rs10,200 crore. Of those, 906,000 laptops are being given away in the
remainder of this fiscal year at a cost of Rs912 crore.

Lenovo, the maker of ThinkPad
laptops, is the world’s second largest PC vendor, behind only Hewlett-Packard
Co. (HP), with a global market share of 13.5%, after overtaking Dell Inc., and
has voiced its ambition to become No. 1.

In the June quarter, according to
market research firm IDC, Lenovo ranked behind Dell, Acer Inc. and HP in India.
Lenovo sells about 275,000 PCs a quarter in India.

“We sold 12.5 million units
worldwide the last quarter,” Amar Babu said. “In India, where we have doubled
our market share to 10.8% in the last two years, we are also looking to be the
leader. It is our long-term dream and aspiration.”

Lenovo has a significant penetration
in both enterprise and consumer segments, but the education and government
sector is comparatively underpenetrated. The Tamil Nadu order will
significantly boost its numbers both in this segment and overall.

“We are doing well across segments,
and we have good momentum,” Babu said.

Whatever the size of the laptop
order for each company, it would help boost sales and visibility, though it
could mean a cut in margins, an analyst said.

“In the long-term, it will be
profitable, but it will not have a major impact on the company’s bottomline
(profit) immediately,” said Vishal Tripathi, principal analyst at market
research firm Gartner, speaking about Lenovo. “Of course, visibility will go up
tremendously and the company will also benefit from after-sales services.”

Since the Tamil Nadu government had
planned to begin distributing the promised freebies on 15 September to mark the
birth anniversary of late former chief minister C.N. Annadurai, a first
small-volume tender was taken out at the time, and HP and Acer won that bid to
supply 6,600 laptops at a price of Rs14,040 per unit. The remaining 906,000
machines must be delivered by the winning bidders in the next five months.

Readymade configurations featuring
the Intel Pentium dual-core processor are available in the market at about
Rs23,000, according to two Chennai retailers.

An Elcot expert panel, which
specified the configuration, had expected bids to come in at Rs14,000-15,000,
the Elcot official cited earlier said.

Lenovo’s price quote is quite
viable, considering its production capacity in China and the volumes at play,
said Sumanta Mukherjee, lead analyst (computing products, IT peripherals and
channels) at CyberMedia Research. Some of the specifications are obsolete, but
it could help Lenovo clear entry-level stock, he said.

Lenovo’s bid came as a “huge
surprise” to Indian manufacturers, according to another bidder, Kaustuv Ray,
chairman of RP Infosystems Pvt. Ltd, which manufactures computers and laptops
under the Chirag brand. Ray’s company quoted a price of Rs14,500 per laptop, he
said.

“We have already told the Tamil Nadu
government that we are willing to match Lenovo’s bid, if the company wishes to
share the contract with other manufacturers,” Ray added.